Strategy
Porter's generic strategies
Last reviewedWhat is Porter's generic strategies?
Three ways to compete: cost leadership (lowest cost), differentiation (something customers pay more for), and focus (either one, aimed at a narrow segment).
When should you use Porter's generic strategies?
Competitive strategy, positioning and turnaround cases, to test whether the client has a clear way to win.
What are its limits?
Some firms succeed with both low cost and differentiation, so treat it as a test of clarity, not a strict rule.
How do you tailor it to a case?
Ask what the client is best at today and what customers pay for, then check whether costs, pricing and investment all support that one position.
Where does it come from?
Michael E. Porter, Competitive Strategy (1980).
Use a framework as a source of ideas, then put a structure built for this specific problem on the table. Reciting a framework by name is a common way to lose marks.